SANTIAGO – Chilean state-owned mining company Codelco, the world’s largest copper producer, on Thursday said it planned to reduce 2016 production costs by 11 percent to bolster its competitiveness and cope with a sharp drop in global prices of the red metal.

The measure will allow Codelco to lower cash costs from $1.386 per pound to $1.255 per pound, which will result in a $574-million drop in the company’s cash costs this year, CEO Nelson Pizarro said.

“Continued cost-cutting is a responsibility we have with Chile because the company’s sustainability is at stake,” Pizarro said.

Codelco has achieved $1.2 billion in savings since it began implementing a plan to reduce costs last year, more than its $1 billion target, and is aiming to increase those savings to $1.8 billion by the end of 2016, the executive said.

Pizarro said the company would not lay off workers and that the new savings would come from a drop in the prices of mining supplies, a better exchange rate and an increase in productivity and efficiency.

The price of copper has fallen sharply in recent days to below $2 a pound, a situation that should improve in the coming months, according to the CEO, who appealed for calm and recalled that copper mining is “a long-term business.”

Mining Minister Aurora Williams said Thursday that base metal demand by China, the biggest consumer of Chilean copper, was forecast to grow 3 percent this year, the lowest increase of the past five years.

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